Design Firm of the Year: HDR
Glancing over HDR's financial results in Texas and Louisiana in recent years, one wouldn't know there was a recession going on. The full-service architecture and engineering firm, which has 16 offices in the region, has steadily grown through the down economy, more than doubling its regional revenue since 2007. A combination of sound business strategies, motivated employees and good luck catapulted the firm to the top of ENR Texas & Louisiana's annual Top Design Firms ranking for the first time. In light of the firm's noteworthy achievements, HDR is named ENR Texas & Louisiana Design Firm of the Year.
Ramon Miguez, engineering department manager for HDR in Dallas, is quick to credit his employees for the firm's success. Such praise might sound like a canned response coming from most executives, but as a global employee-owned firm, HDR has a staff highly motivated to keep the firm pushing ahead.
"I truly believe that the biggest differentiator is our ownership model," he says. "The vast majority of employees are stockholders and only employees can be stockholders. Every one of us has a vested interest in making sure we succeed."
And succeed HDR did. In 2007, the company reported $73.5 million in regional revenue. Since then, revenue has grown steadily by double-digit figures, reaching $165.75 million in 2011.
Heidi Higgason, HDR vice president and director of operations in the South Region, agrees that employees "buckled down and worked harder" as the recession hit, but acknowledges that fortunate timing played a big part in the equation as well. Substantial projects awarded to HDR were funded before the recession hit, including the $481-million-Ambulatory Care Center at the Lackland Air Force Base in San Antonio and the $1.3-billion Parkland Hospital replacement project in Dallas, one of the largest hospital projects in the U.S.
"That kept us busy for a while when others had no work," she says. "That was the underlying positive that we could build everything else on. We weren't focused entirely on there being no work. We had large projects sustaining us while the crunch happened."
Right Place, Right Time
Some sound strategies also positioned the firm to benefit from good timing. Higgason notes that in the years prior to recession, HDR focused on establishing its position in the federal market. "We realized that we needed to build a stronger relationship with the Department of Defense," she says. "It built us up to the point where we earned trust on a number of large projects right when it mattered most."
The Ambulatory Care Center at Lackland was not only a financial success; it was also selected to receive an award for concept design in the 2011 U.S. Air Force design competition. When completed, the 680,000-sq-ft center will become the largest ambulatory-care surgical center in DOD.
With the Lackland project already under construction, HDR is currently finishing design work on the $1-billion William Beaumont Army Medical Center replacement hospital at Fort Bliss in El Paso. That project is scheduled to open in 2016.
HDR's health-care work is not only noteworthy in the region—HDR is ranked as the ENR Texas & Louisiana top firm in the health-care sector—the Dallas office portfolio includes many of the company's largest health-care projects nationally. Other notable HDR sector projects include the $438-million University of Texas Medical Branch Jennie Sealy hospital replacement in Galveston and the $100-million Sheikh Zayed Bin Sultan Al Nahyan Building for Personalized Cancer Care, which broke ground in November.
That success hasn't gone unnoticed. Last year, Hank Adams served as health-care principal in the Dallas office, representing work just in the region. In January, he was promoted to national director of health care. "Part of the reason I was promoted was based on what we have accomplished in Dallas," he says. "There was recognition that we built a great culture and a successful model that the firm wants to emulate nationally."
Adams says the Dallas practice is committed to a servant-leadership model, which emphasizes the value of team members and promotes collaboration. He says it's a natural fit in an employee-owned firm. "Everyone has bought in and has a personal stake in the success of the office," he says. "People aren't waiting for someone else to tell them what to do. Everyone is empowered."
Engineered for Success
While the architecture side of HDR's business grew, the firm's engineers kept pace as well. HDR tops this year's regional civil engineering ranking with $95.83 million in revenue. Contributing to that tally is a wide range of work in transportation (ranked #3), water supply (ranked #3) and power (ranked #2).
In transportation, HDR remains in the mix of recent megaprojects throughout the state, including the PGBT-Western Extension (SH 161) in Dallas and the IH 45/IH 610 Interchange in Houston. Miquez sees big potential for more highway and bridge work in the near future, as the state considers several public-private partnerships.
"You look at what's on the street now, [Texas] is proceeding with large scale projects through the PPP approach," he says. "There are projects with the potential for revenue generation. We've got several of those brewing right now."
Both freight and commuter rail have proven surprisingly strong in recent years as well. In transit, the firm has worked on streetcar studies for Dallas Area Rapid Transit and on commuter rail feasibility studies in Houston. Near Fort Worth, the firm is wrapping up design of improvements to Tower 55, which is an infamous bottleneck in the national rail system.
Miguez notes that, in light of increased interest in rail planning at the state level, he sees improving opportunities in rail in the coming year. "It's clear that the state as a whole has come to the realization that we need a multimodal approach," he says.
Another expanding market that HDR is capitalizing on is port work. Neil Graff, south Texas area manager for HDR, says the push to export product from Eagle Ford shale is prompting maritime improvements. "We're seeing robust opportunities coming out of Corpus Christi for ports and harbor work, spun off from the oil and gas production in Eagle Ford," he says. "That's on top of our work for the Navy and the U.S. Maritime Administration."
The firm's water-wastewater practice also saw recovery in 2011, with HDR picking up three key projects in the Dallas-Forth Worth metroplex. These included design of a 23-mile, 84-in. pipeline segment of the joint Dallas Water Utilities and Tarrant Regional Water District IPL Project delivering raw water from Lake Palestine to the metroplex.
The firm also won design of the City of Dallas Able Storm Water Pump Station, one of the first large applications of concrete volute pumps in the U.S., and design of the largest headcell grit removal installation in the U.S. at the Dallas Water Utilities' central wastewater treatment plant. In south Texas, the firm is a design consultant on a $190-million portion of the San Jacinto River Authority's $480-million plan for a new water treatment plant on Lake Conroe.
Staying Steady
Although HDR's rise in the region remains steady, executives are cautious about the future. Higgason doesn't expect the firm will continue to grow at the same rate in the coming years. "We'll continue to be strong here and see some growth, but not at the same pace as in the past," she adds. "I've projected that 2012 will be similar to 2011, with maybe a bit of growth."
The company increased regional revenue through the recession but didn't ramp up staff in its 16 offices in the region. Instead, it leveraged staff from other offices, keeping employees busy in underutilized offices and not overextending local staff. "The way we are set up is that projects are absolutely local, but we can workshare with other offices as needed," Higgason says. "Internally, we can reach out globally, but we serve locally."
